The wine industry has been in a downturn for some time. With a combination of older customers aging out, increased competition and other factors, a downward trend was almost inevitable. Now is the time to set your winery up for long-term success. That way you’re prepared for any wine industry downturns.
Here’s how:
1. Know the signs. Overproduction, a crowded marketplace and lower demand are a few of the major red flags for an upcoming downturn. In the case of the wine industry, there are a staggering number of options even within varieties. But as baby boomers age out of the market, it will be difficult to fill that distribution void with the less brand-loyal Gen Xers and Millennials. These are the signs to pay attention to so that you can prepare years (or even a decade) in advance of the downturn.
2. Focus on your existing customers. Even as trends within the wine industry shift, established brands always have a base of loyal customers. Don’t lose sight of what’s working as you focus on new tactics. The idiom “don’t throw the baby out with the bathwater” comes to mind. It’s less expensive and easier to continue to successfully market and engage with your best customers. Consistency is key. Overhauling your core brand values and messages in an attempt to draw in more business rarely works.
3. Increase your routes to market NOW. Don’t scramble to find new routes to market when it’s too late. Diversify your routes and find success with as many alcohol buyers as possible. Build solid relationships with the trade. Once the wine market begins changing, it will be incredibly difficult to find stores and restaurants willing to experiment and your core buyers will be invaluable.
4. Learn to play the long game. If you’ve been successfully tracking and forecasting, you should already have a plan in place as your wine sales begin to drop. Anyone who has battened down the hatches and waited out a downturn before knows it’s not about short-term success.
5. Don’t rush to run sales or slash prices. Your prices are a part of your brand, and they set a specific message. While sales and promotions can be a great tool, they should not be the first option you run to in an effort to make sales. Keep your brand and pricing structure strong, clear and focused.
6. Expand beyond the tasting room. In the wine industry many of your customer relationships are built in the tasting room. When many of those customers go back to their home market they may not be able to find your brand. Place some of your most popular tasting-room only products into expanded distribution so your most loyal customers can have access to their favorite wines in their home markets. Work with an e-commerce retailer like Wine.com to sell your products in more markets. Think of ways to reach your most loyal customers where they are.
6. Get creative. Experiment with some small-batch wines. Host local (virtual) events. Try different things on your social media channels. Create video content that positions you as a knowledge leader (think: wine-pairing videos, etc.). The possibilities are endless.
7. Be prepared for the upturn. This won’t be the state of the wine industry forever. Have a strategy in place for the upswing so you can capitalize early and fast, and do so efficiently.
Ultimately, working through an industry downturn is about mindfulness. Understand that it’s inevitable, that it will change, and that there is still plenty of opportunity to be had even in these situations.
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